UK e-tail continues to soar as physical shops reopen
While online retail boomed during the lockdown, it's interesting to see that e-sales are still soaring even though non-essential shops have reopened in much of the UK.
The latest IMRG Capgemini Online Retail Index on Tuesday showed that online retail sales were up 41.3% year-on-year in reopening week, the seven days from Sunday June 14. And the amount spent online was 1.8% higher than in the previous week when physical shops were still firmly closed.
Whether this is an indication that online shopping has become a habit for more people because of the lockdown, or whether it's simply a sign of consumers still being cautious about venturing into physical shops will take some time to answer. We’ll have to wait and see how online shopping pans out for the rest of the year.
But for now, it underlines the general trend towards web shopping that looks to have accelerated because of the coronavirus crisis.
What’s particularly interesting is that multichannel retailers continued to see a big uplift during the week with a record 71% rise year-on-year, even though their physical branches were starting to reopen. Their sales rose 4% week-on-week, easily outstripping the 1.8% growth seen across the market.
The report, which tracks the online sales performance of over 200 retailers, said that the overall 41.3% growth seen was the second strongest year-on-year rise since lockdown measures were put in place.
And what were consumers actually buying? Well, while they were buying fashion, they weren't increasing their spend compared to the previous week. Clothing sales were flat week-on-week and fell 5.8% compared to a year ago. It’s likely that this is one area in which the reopening of physical stores did dent online sales.
Instead, consumers turned to Home & Garden and Electricals – up 114.7% year-on-year and 99.9% respectively. Health & Beauty sales also rose by 70.5% on the year, but were actually down by 2.5% on the week. With many Health & Beauty stores open during lockdown, however, this dip may not have been influenced by the high street reopening.
Lucy Gibbs, managing consultant - Retail Insight at Capgemini, said: “Multichannel retailers saw online sales go from strength to strength despite a hypothesis that the ability to spend in reopened stores would decrease the reliance on online shopping. As lockdown eases in an attempt to shift back towards the former pre-Covid-19 norm, the question remains which consumer behaviours and trends will return, and which will have changed for the long term? Right now, it may be too early to unpick the patterns from consumers’ pent-up demand being released [but] it appears moving retail front-of-mind is potentially causing a halo effect in digital sales.”
Meanwhile, Andy Mulcahy, strategy and insight director at IMRG, added: “At first glance, it might seem a bit odd that the multichannel retailers recorded the highest online growth ever in the week that their stores reopened. It seems that all the fanfare around high streets opening again did spur an increase in sales activity, as people perhaps start to feel things are returning to something a bit closer to ‘normal’. The bulk of activity remains focused online, with shoppers visiting stores in much lower numbers but with a clearly focused intention to complete a purchase, as opposed to just browsing.”
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